ADventures in Law

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Nothing says Holiday Season like the final public Federal Trade Commission meeting of the very long year. The lights are hung, joy is sort of in the air and we turn to our four commissioners for even more holiday cheer. Well actually, this week there were just three – Commissioner Wilson was not in attendance today. We, of course, would never miss joining today’s (or any other month’s) festivities, lest to let down our dear readers who rely on us to report on all the <s>tea</s> events.

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So the big item on the agenda was <a href="https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-seeks-public-comment-potential-updates-its-green-guides-use-environmental-marketing-claims">the announcement</a> that the FTC will review the “Guides for the Use of Environmental Marketing Claims,” affectionately known as the Green Guides. It would be an understatement to say that this review has been eagerly awaited. One of the first questions we get every time we speak is, when are they going to review the Green Guides? We kept saying it would happen this year – and we made it just under the wire.

It is standard practice at the FTC to review every rule or guide at least every ten years, and the <a href="https://www.ftc.gov/news-events/news/press-releases/2012/10/ftc-issues-revised-green-guides">Green Guides were last amended</a> in 2012. Since then, green claims have evolved, and there is concern that the Green Guides have become dated, partly because they didn’t address some important issues and claims. Leading the pack of concerns is the question of how the Commission would analyze sustainability claims. <a href="https://www.ftc.gov/sites/default/files/documents/federal_register_notices/guides-use-environmental-marketing-claims-green-guides/greenguidesfrn.pdf">Back in 2012</a>, the Commission kicked the proverbial can on that one – stating at that time that with respect to natural and sustainability claims, “the Commission lacks sufficient evidence on which to base general guidance.” (The Commission also did some consumer research suggesting 2012 consumers thought “sustainable” meant “durable”).

Probably the most important principle derived from the Green Guides is to be specific about the green claim that you make. Generalized claims such as “environmentally friendly” and “earth safe” may be broadly interpreted by consumers, and there are few products or companies that can make such broad claims in a nondeceptive manner. Instead, specificity is the key for lawful green claims – what aspects of your product or service are green, and what makes it green.&nbsp; We don’t see this changing with the updates; it is just good guidance.&nbsp;

With all that greenery in the background, let’s turn to the meeting. And if you were hoping to get a lot of insight about what the commissioners are thinking and where this is heading, we are going to disappoint you. They said the bare minimum. The holiday spirit was not in abundance.

Chair Khan talked about the importance of regular reviews, emphasized that people want to know about the environmental impact of the products they buy, and noted that it is impossible for consumers to verify such claims. She flagged a few areas for emphasis – carbon offsets, net zero claims, organic and biodegradability. Commissioner Slaughter supported review with no detailed remarks. Commissioner Bedoya also didn’t have much to say beyond noting the timeliness of the review. And Commissioner Wilson was not there, but her attorney advisor registered an excellent “Yes” vote by proxy.

The <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/GreenGuides-FRN-11-5-22.pdf">draft Federal Register notice</a> announcing the review was also not overly illuminating. The notice is pretty typical and goes through all the standard questions that the agency considers regarding whether to retain guides and how they should be modified to keep up with economic and societal changes. The notice does, however, list a few issues that have “generated increased attention and interest” and seeks comment on types of claims including carbon offsets and climate change, compostable, degradable, ozone safe, recyclable, energy use, organic and sustainable. The comment period will be open for 60 days after it gets published in the Federal Register.

Keep in mind that reviewing guides, particularly the Green Guides, takes a lot of time and often relies heavily upon well-conducted research and analysis. Last go-round, the review took several years, thousands of comments were filed and the FTC held <a href="https://www.ftc.gov/news-events/news/press-releases/2008/06/ftc-announces-workshop-green-guides-environmental-claims-building-textiles">three workshops</a> on how consumers understand green claims. This will take time. When will we actually see proposed revised Green Guides?&nbsp; If we are lucky they will be a holiday gift in 2023.&nbsp;

The second item on the agenda was a presentation on data security, which was given by a representative from the FTC’s Chief Technology Office. For those who are not that familiar with the FTC’s organizational structure, that was a bit of an unexpected choice to present on this topic. For well over a decade, virtually all of the FTC’s primary data security enforcement work has been done by the FTC’s Division of Privacy and Identity Protection (DPIP) (and the Division of Enforcement), and one would have expected a DPIP representative to make such a presentation.

With that said, the presentation was an overview of how the FTC approaches data security issues and, in particular, how the order provisions reflect an approach of addressing risk systemically. The presentation also detailed how technologists work with FTC staff to investigate technology cases. The presenter discussed the importance of multifactor authentication (MFA), phishing-resistant MFA, encryption, zero trust architecture and appropriate data retention practices. The commissioners again didn’t have much to add, with Chair Khan talking about a recent FTC data security case against <a href="https://www.ftc.gov/news-events/news/press-releases/2022/10/ftc-takes-action-against-drizly-its-ceo-james-cory-rellas-security-failures-exposed-data-25-million">Drizly</a> that named the CEO as well as the company. Chair Khan noted that this was a way to make sure that inadequate security was not a “cost of doing business.”

And as usual, the meeting kicked off with two-minute updates from members of the public who discussed a range of issues, including green concerns, pharma issues and potential legislative changes to the antitrust laws.

17th Public Commission Meeting – The FTC is Finally Seeing Green?